It can be hard for parents to assemble information about schools

Here's a critique of the NYC high school choice system, from a former Dept of Ed administrator who now runs a public- and private-school admissions consulting firm that helps parents navigate the system. He calls for better advising...

Why high school admissions actually doesn’t work for many city students — and how it could
by Maurice Frumkin on August 7, 2015

"It was my pleasure to read Professor Alvin Roth’s recent piece on why New York City’s high school admissions process now works most of the time. And as the city’s former deputy director of high school enrollment and a current admissions consultant who has helped thousands of families navigate the process, I see his observations play out every day.

Given how massive the New York City process is, the mechanism of assigning students to schools after families have made their choices does, indeed, work well. But the process by which those choices are made remains complicated, and very much depends on expertise or the ability to spend an excessive amount of time understanding how it works. Many students still go without either.

...

"Part of my role at the DOE was to train middle school counselors, whose workloads, savvy, and degree to which their students’ parents were engaged in the process varied widely. Over time, many counselors have developed into admissions experts who do an outstanding job informing their families. A Manhattan school counselor entering her third year recently told me, though, that it was a challenge for her to become familiar with schools beyond the “brand name” schools that everyone talks about.

"It’s a problem Roth acknowledges. “Although it’s great to have a marketplace that gives you an abundance of opportunities, these may be illusory if you can’t evaluate them, and they can cause the market to lose much of its usefulness,” he writes.

 ...

"I speak with families every day who are convinced that although there are 5,000 applicants to a selective program with 100 seats, an offer is inevitable because their child meets the published selection criteria. They will, therefore, list fewer choices – and often only choices that represent the most sought-after, screened programs."

********

I'm reminded of this earlier post, and the advice I gave to "Jimmy," who had suffered from just this mistake...

Saturday, May 7, 2011

High school choice in New York City: some advice for next year

The Richmond Fed on market design

 In the magazine of the Federal Reserve Bank of Richmond, in an article called
Economists and the Real World Tim Sablik, interviews Susan Athey and writes about market design.

"Many academic economists have begun collaborating more actively with private firms and public institutions. This practice has become common in the discipline of market design, for example. Robert Wilson of Stanford University helped design auctions for the oil, communications, and power industries. Along with his former student Paul Milgrom of Stanford University and with Preston McAfee, who is now the chief economist at Microsoft, Wilson received the 2014 Golden Goose Award for designing the first spectrum auctions used by the Federal Communications Commission in 1994. Alvin Roth of Stanford University and co-winner of the 2012 Nobel Prize in economics collaborated with public schools in New York City and Boston to design algorithms to improve student placement in preferred schools and with doctors to arrange kidney transplant exchanges between pairs of donors and recipients.

"Market design is a team sport," Roth said in his Nobel acceptance speech. "And it is a team sport in which it is hard to tell who are theorists or practitioners because it blurs those lines."

"Susan Athey of Stanford University says that it is "not an accident" that economists studying market design and industrial organization have collaborated heavily with real-world firms and institutions. "If you're trying to solve a real problem, you need to understand the full set of constraints to propose the best solution," she says. Her role as a consul­tant for Microsoft has influenced her research on Internet markets, such as online advertising.
...
"I got the impression that many of my peers thought I was selling out," she says. "They couldn't really understand why I was so confident my work with Microsoft was going to come back and improve my research."

"Today, many of the leading empirical studies rely on large datasets collected by firms and government agencies. As a result, more economists seem willing to risk some criticism to obtain access to these data. In a 2014 article in Science magazine, Liran Einav and Jonathan Levin of Stanford University reported that 46 percent of papers published in the American Economic Review in 2014 relied on private or non-public administrative datasets, compared with just 8 percent in 2006.
...

"I think the profession is starting to normalize the idea of working with a firm to get access to data," says Athey. "Increasingly, people are recognizing that without this private sector data, we're just not going to be able to get a complete picture of trends which could end up being very important to the economy."

New papers on matching by Yeon-Koo Che and Olivier Tercieux (large markets and top trading cycles)

In the Cowles Foundation working paper series:

"Efficiency and Stability in Large Matching Markets" 
Cowles Foundation Discussion Paper No. 2013

YEON-KOO CHE, Columbia University
Email: yc2271@columbia.edu
OLIVIER TERCIEUX, Paris-Jourdan Sciences Economiques (PSE)
Email: Tercieux@pse.ens.fr

We study efficient and stable mechanisms in matching markets when the number of agents is large and individuals’ preferences and priorities are drawn randomly. When agents’ preferences are uncorrelated, then both efficiency and stability can be achieved in an asymptotic sense via standard mechanisms such as deferred acceptance and top trading cycles. When agents’ preferences are correlated over objects, however, these mechanisms are either inefficient or unstable even in an asymptotic sense. We propose a variant of deferred acceptance that is asymptotically efficient, asymptotically stable and asymptotically incentive compatible. This new mechanism performs well in a counterfactual calibration based on New York City school choice data.

"An Analysis of Top Trading Cycles in Two-Sided Matching Markets" 
Cowles Foundation Discussion Paper No. 2014

YEON-KOO CHE, Columbia University
Email: yc2271@columbia.edu
OLIVIER TERCIEUX, Paris-Jourdan Sciences Economiques (PSE)
Email: Tercieux@pse.ens.fr

We study top trading cycles in a two-sided matching environment (Abdulkadiroglu and Sonmez (2003)) under the assumption that individuals’ preferences and objects’ priorities are drawn iid uniformly. The distributions of agents’ preferences and objects’ priorities remaining after a given round of TTC depend nontrivially on the exact history of the algorithm up to that round (and so need not be uniform iid). Despite the nontrivial history-dependence of evolving economies, we show that the number of individuals/objects assigned at each round follows a simple Markov chain and we explicitly derive the transition probabilities.

"Payoff Equivalence of Efficient Mechanisms in Large Matching Markets" 
Cowles Foundation Discussion Paper No. 2014

YEON-KOO CHE, Columbia University
Email: yc2271@columbia.edu
OLIVIER TERCIEUX, Paris-Jourdan Sciences Economiques (PSE)
Email: Tercieux@pse.ens.fr

We study Pareto efficient mechanisms in matching markets when the number of agents is large and individual preferences are randomly drawn from a class of distributions, allowing for both common and idiosyncratic shocks. We show that, as the market grows large, all Pareto efficient mechanisms -- including top trading cycles, serial dictatorship, and their randomized variants -- are uniformly asymptotically payoff equivalent “up to the renaming of agents,” yielding the utilitarian upper bound in the limit. This result implies that, when the conditions of our model are met, policy makers need not discriminate among Pareto efficient mechanisms based on the aggregate payoff distribution of participants. 

Repugnant markets watch: ISIS institutionalizes a market for sex slaves (NY Times)

The NY Times has a long article on sex slavery in the Islamic State, by Rukmini Callimachi, including some detail about the market's rules and institutional features:

ISIS Enshrines a Theology of Rape--Claiming the Quran’s support, the Islamic State codifies sex slavery in conquered regions of Iraq and Syria and uses the practice as a recruiting tool.

"The systematic rape of women and girls from the Yazidi religious minority has become deeply enmeshed in the organization and the radical theology of the Islamic State in the year since the group announced it was reviving slavery as an institution.
...
"The trade in Yazidi women and girls has created a persistent infrastructure, with a network of warehouses where the victims are held, viewing rooms where they are inspected and marketed, and a dedicated fleet of buses used to transport them.
...
"A growing body of internal policy memos and theological discussions has established guidelines for slavery, including a lengthy how-to manual issued by the Islamic State Research and Fatwa Department just last month.
...
"The Islamic State’s formal introduction of systematic sexual slavery dates to Aug. 3, 2014, when its fighters invaded the villages on the southern flank of Mount Sinjar, a craggy massif of dun-colored rock in northern Iraq.
...
"Their captors appeared to have a system in place, replete with its own methodology of inventorying the women, as well as their own lexicon. Women and girls were referred to as “Sabaya,” followed by their name. Some were bought by wholesalers, who photographed and gave them numbers, to advertise them to potential buyers.

"Osman Hassan Ali, a Yazidi businessman who has successfully smuggled out numerous Yazidi women, said he posed as a buyer in order to be sent the photographs. He shared a dozen images, each one showing a Yazidi woman sitting in a bare room on a couch, facing the camera with a blank, unsmiling expression. On the edge of the photograph is written in Arabic, “Sabaya No. 1,” “Sabaya No. 2,” and so on.
...
"The use of sex slavery by the Islamic State initially surprised even the group’s most ardent supporters, many of whom sparred with journalists online after the first reports of systematic rape."
...
"In a pamphlet published online in December, the Research and Fatwa Department of the Islamic State detailed best practices, including explaining that slaves belong to the estate of the fighter who bought them and therefore can be willed to another man and disposed of just like any other property after his death.

"Recent escapees describe an intricate bureaucracy surrounding their captivity, with their status as a slave registered in a contract. When their owner would sell them to another buyer, a new contract would be drafted, like transferring a property deed. At the same time, slaves can also be set free, and fighters are promised a heavenly reward for doing so.

"Though rare, this has created one avenue of escape for victims.

"A 25-year-old victim who escaped last month, identified by her first initial, A, described how one day her Libyan master handed her a laminated piece of paper. He explained that he had finished his training as a suicide bomber and was planning to blow himself up, and was therefore setting her free."

Private and public sex, and prostitution

A thoughtful op-ed in the NY Times asks just what is prostitution, and how do we distinguish various kinds of private (as opposed to public) sexual behavior?
When Prostitution Is Nobody’s Business
By LAURIE SHRAGE

"But where, exactly, is the border between the private exchange of money or gifts and the impersonal profit-making of the market?

"When sexual partners exchange money and gifts between themselves, we generally see this as a private exchange. However, what do we do if a person has several sexual partners, and regularly receives money and gifts from each of them? Traditionally, a woman who had more than one sex partner from whom she received various forms of material support was likely to have been regarded as a “public woman,” that is, a prostitute, whore or sex worker. Although there has been significant social tolerance historically for men who have and support multiple mistresses, moral disapprobation for women who have multiple lovers has resulted in laws in which women who have several sex partners from whom they accept gifts can face arrest for prostitution.

"Having multiple, casual or ongoing partners from whom one receives monetary support is not the same as running a brothel, or setting up a home business that advertises publicly and accepts customers based on their ability to pay. Yet the line between these kinds of activities may be hard, at times, to make out. For example, should a person who is, say, polyamorous, and has multiple lovers who economically support her, have a right to physical, informational and decisional privacy in regards to her sex life?

Credit cards in Who Gets What and Why--excerpt in Business Insider

Yesterday's Business Insider published a few-paragraph excerpt from Who Gets What and Why:

The 'cash back' you get from your credit card comes from the guy behind you in line

Surrogacy troubles in Thailand

The Guardian has the story, about incomplete contracts and changing laws and social support for surrogacy in Thailand.
Gay parents fight to leave Thailand with surrogate baby daughter

"A same-sex couple is embroiled in a legal battle in Thailand after the surrogate mother who gave birth to their child has refused to allow them to leave the country claiming she was unaware they were gay.

"The surrogate – who is biologically unrelated to the baby – handed over baby Carmen to Gordon Lake, an American, and his Spanish husband, Manuel, in January but later refused to sign documents to allow the infant to get a passport.

Conference housing pirates--the (criminal) market for hotel rooms

Here's a scam I hadn't encountered before.

I will be speaking at a transplant conference in February, and last week my phone rang and someone asked me if I had already made my hotel reservations, and offered to make them for me. I declined, and emailed the conference organizer asking if this was how housing was being arranged. In reply I got the following (slightly redacted) email, addressed to all the speakers....

"Dear ... Faculty,

I have received word from two speakers who advised me that they were contacted by a company called Expo Housing. (They can go by other names too) xxx told me she was contacted by a xxx who left an 866 call back number.

This company ...has NOT been contracted to organize, sell or arrange housing for anyone attending or speaking at the [conference] taking place in February 2016 ....

Please DO NOT BOOK housing with anyone. As a speaker you will receive a travel and housing survey from me or another member of the  staff located in the ... National Office. Please contact me immediately if you are contacted by anyone trying to book your housing. 

Our housing website is under construction at this time but again, as a speaker your housing will be arranged by  staff.

Housing pirates or hijackers are illegal entities who "sell" hotel rooms. These rooms can exist or not exist. Often times your money is lost. Typically these people target large meetings like the American Transplant Congress, but no meeting is safe. Any rooms booked through a pirate are not guaranteed by the group nor will they be included in the [conference] block of rooms. "

  

Organjet versus regional transplant lists

Forbes discusses the unequal waiting times for deceased donor organs caused by the fact that transplant waiting lists are organized regionally.

Your New Liver Is Only A Learjet Away: First Of Three Parts

"Tayur’s initial business model for OrganJet was quite simple. OrganJet would charge a modest fee to help clients figure out which transplant programs would be likely to shorten their waiting time for an organ. Clients could then sign up to have access to an on-demand flight, in case one of those transplant programs called up with an available donor. Having a flight at ready disposal is critical because many transplant programs require patients to arrive within six hours after an organ becomes available, or they pass the organ on to the next person on the list. The six hour requirement exists because in organ transplantation, donor organs need to be placed into recipients in a timely manner or the organs accumulate irreversible damage. Thus, if a patient on the transplant waiting list in, say, Pittsburgh cannot make it there in time, the transplant team will call another candidate until it finds one that can make use of the organ.

Excited about his chance to address an important social problem, Tayur began working through the details of his business plan, issues such as how many jet companies he would need to contract with and how much money he would need to charge customers for a given flight. “I envisioned OrganJet as an opportunity to make some money and save some lives at the same time,” Tayur told me, words not that different from what honest medical school applicants would tell interviewers about their career choice. The fees he charged customers for these flights would not only cover the charge of paying for the pilots and the fuel, but would include a surcharge that would be the source of OrganJet’s profits.

Tayur was excited about his idea, but the more people he bounced his business plan off, the more pushback he received. In particular, many people told Tayur his idea would only promote greater unfairness in the transplant system, by further disadvantaging people who lacked the financial resources to pay for OrganJet’s services. Tayur thought he could minimize this problem by convincing health insurance companies to pay for the flights, but his critics pointed out that many low-income patients wouldn’t be able to afford such generous insurance.

Tayur realized his new company needed to become two new companies. He had already incorporated OrganJet as a nonprofit entity in May 2011. So in July of 2012 he started a second company, GuardianWings, a tax-exempt nonprofit that raises funds to cover flight costs for low-income patients. His vision was now clear – he would work to overcome geographic inequities in transplantation one patient at a time, giving everyone a fair shake at life-saving treatments even if they were not wealthy CEOs."
...
"Neither Medicare nor Medicaid currently pays for OrganJet’s services, and it is too early to tell whether private insurers will embrace OrganJet’s prices. Tayur, the CEO of OrganJet, is still negotiating with insurance companies on a case-by-case basis. He is also negotiating with large companies that self-insure their employees, presenting them with results of statistical analyses he has conducted which demonstrate that OrganJet’s services could save them money: “It would get their employees off dialysis sooner, not only improving their quality of life in the process, but also allowing them to return to work sooner, with greater productivity.”"

SITE workshops on Psych and Econ, and on Experimental Econ, Aug 10-14

Starting tomorrow, a week of behavioral and experimental econ at Stanford...

Session 6: Psychology and Economics

SITE 2015 Workshop

August 10-12, 2015

The location for this session will be the Arrillaga Alumni Center, 326 Galvez St., Stanford campus

Organized by:

• Doug Bernheim, Stanford University
• John Beshears, Harvard University
• Vincent Crawford, University of Oxford
• David Laibson, Harvard University
• Ulrike Malmendier, University of California, Berkeley

This workshop will focus on recent research in behavioral economics. While the standard model of economic decision-making has proven useful in a wide variety of settings, its limitations are also well-documented. The field of behavioral economics seeks to enrich the standard model, thereby improving its descriptive and predictive accuracy, by incorporating insights from psychology and other disciplines, and to examine the implication of those enriched models for a wide variety of important economic issues, such as the effects of policies affecting spending, saving, labor supply, and investment. While considerable progress has been made in this subfield, our theoretical and empirical understanding of economic behavior remains incomplete.

Session 7: Experimental Economics

SITE 2015 Workshop

August 13-14, 2015

The location for this session will be the Arrillaga Alumni Center, 326 Galvez St., Stanford campus

Organized by:

• Katherine Baldiga Coffman, Ohio State University
• Christine Exley, Harvard Business School
• Muriel Niederle, Stanford University
• Alvin Roth, Stanford University
• Lise Vesterlund, University of Pittsburgh

This session is dedicated to advances in experimental economics combining laboratory and field-experimental methodologies with theoretical and psychological insights on decision-making, strategic interaction, and policy. We invite papers in lab experiments, field experiments, and their combination that test theory, demonstrate the importance of psychological phenomena, and explore social and policy issues.

Presentation theme groupings:

• Time Inconsistency - Thursday 9-10:30am
• Social Preferences - Thursday 11am-12:30pm
• Generosity & Giving - Thursday 2-3:30pm
• Shorter Papers and Future JM Candidates - Thursday 4-6pm
• Experimental Techniques - Friday 9-10:30am
• Incentive Schemes - Friday 11am-12:30pm
• Theory Experiments - Friday 2-3:30pm
• Consumption (Positive & Negative) - 4-5:30pm

Is it time to compensate kidney donors?

Tina Rosenberg in the NY Times thinks it is: It’s Time to Compensate Kidney Donors

"Still, a debate is beginning to emerge. In the United States, some prominent kidney doctors believe we might learn something from Iran. “My journey was from ‘this is all immoral and we shouldn’t think about it’ to the other side,” said Robert Gaston, executive co-director of the Comprehensive Transplant Institute at the University of Alabama at Birmingham, and a recent past president of the American Society of Transplantation, one of two American organizations of transplant doctors. “Iran’s program can’t be termed a universal success. But it is a reasonable approach, a transparent, ethical way to address kidney disease in the population there.”

While no country seems willing to follow Iran into providing monetary incentives for kidney donors, many are starting to remove the financial disincentives that make donating a kidney an activity only for those with disposable income."

You can't say that! Repugnant words

The WSJ has the story on words we think people shouldn't say:
How Dare You Say That! The Evolution of Profanity
From ‘Odsbodikins’ to ‘belly,’ the banned words of our ancestors look as bizarre today as tribal rituals

"In other respects, we’re actually quite a bit like our ancestors. We are hardly beyond taboos; we just observe different ones. Today, what we regard as truly profane isn’t religion or sex but the slandering of groups, especially groups that have historically suffered discrimination or worse. Our profanity consists of the N-word, that C-word once suitable for an anatomy book discussion of women’s bodies, and a word beginning with f referring to gay men (and some would include a word referring to women beginning with b).

"It might seem strained to compare our feelings about the N-word with a bygone era’s appalled shuddering over the utterance of “By God!” But do note that I have to euphemize the N-word here in print just as someone would have once have felt compelled to say, “By Jove!”

First kidney exchange in South Africa

South Africa's Daily Maverick has the story:
Saving lives: South Africa joins paired kidney exchange revolution, ANDREA TEAGLE  SOUTH AFRICA 06 AUG 2015

"On March 6, 2015, South Africa’s first kidney exchange took place at the Donald Gordon Medical Centre in Johannesburg. After having been kept alive by dialysis for years, 24-year-old Vivek [not his real name] and 60-year-old Allison Stevenson were both given a new lease on life.
...
"This was South Africa’s first paired kidney exchange. And it happened almost by chance.
“This youngster in Port Elizabeth – his mother was so anxious about him, she phoned the transplant centre in Johannesburg … It was like the next week that I phoned up.” Stevenson recalls, “And there, Belinda (a transplant coordinator), had this file on her desk, where the aunt didn’t match the nephew. It just so happened that she matched me, and Sally matched Vivek.”
...
"South Africa relies primarily on deceased kidney donations. Of the 4,300 people on the waiting list for life saving, most are waiting for a kidney. There is only a small hope of getting one: just 0.2% of the population are registered as organ donors. And a host of medical requirements need to be satisfied for a match. The waiting list is like a mile long tightrope to life and many people never make it across.
...
"This is an example of what economists call a mismatched market. And for at least one economist, Stanford Professor Alvin Roth, it posed an exciting challenge. Roth and his colleagues were able to apply a model to the problem they had initially built out of mathematical curiosity. In 2012, this work won him a joint Nobel Prize in Economics.
Roth’s matching program builds little bridges between supply and demand. The simplest case is a two-way exchange like Stevenson’s. By decoupling the donors from their intended (but incompatible) recipients, and recoupling them with compatible ones, long chains of transplants can take place that otherwise would have been impossible.
...
"In South Africa this type of optimised matching is but a dream.
The National Health Act allows for living donors to donate to a blood relative or a spouse. If the donor is not a relative, he or she must apply for special permission from the Department of Health. In South Africa – as in every other country in the world with the exception of Iran – the sale of organs is illegal.
The hesitancy to implement paired matching, although the law does not in fact prohibit it, is likely partly due to fear of abuses through monetary exchange. (It is, however, lawful for the donor to be reimbursed for “reasonable costs” associated with the transplant.)
However, Stevenson’s case shows that paired exchanges can be subjected to the same careful scrutiny as direct donations. Only after establishing that neither donor had been coerced, misled or financially incentivised, did the Department of Health give the go-ahead. Further, the pairs were not allowed to meet or communicate prior to the operation, so Stevenson has never met her actual donor.
...
"The successful matching is an important step towards overcoming what surgeon Francis Delmonico, who was involved in the original matching program in the US, described as “the frustration of a biological obstacle to transplantation”. However, without a registry of living donors, finding a paired match will require hours of effort, and many will not be as lucky as Stevenson."

Who Gets What and Why in Romanian

Aside from the translation of Who Gets What and Why into British English (in which the subtitle changed), I think the Romanian translation is the first one to come out: 
Cine ce primeste si de ce. Noua economie a pietelor de matchmaking si proiectarea acestora - Roth E. Alvin

The Romanian version has a foreword by Alex Nichifor

An attack on science, and a defense in the LA Times: Golden Geese versus Golden Fleece

Tiffany Field, who shared a Golden Goose Award (given "to groups of researchers whose seemingly obscure, federally-funded research had led to major breakthroughs"), comes to the defense of social science, in the Los Angeles Times, in reply to an op-ed arguing that taxpayers' money is being wasted.
Opinion Social science caricature sets back human progress
By TIFFANY M. FIELD

The Golden Goose award arose in reaction to attacks on Federal funding of science, and takes its name in part from Senator William Proxmire's 1975-88 "Golden Fleece Awards" which were intended to ridicule funded grant proposals with funny sounding names. 

Course allocation at Wharton: looking under the hood

A new paper by Budish, Cachon, Kessler and Othman gives more detail on how the course allocation tool at Wharton works at a computational level. It's a great example of practical market design as economic engineering.

Course Match: A Large-Scale Implementationof Approximate Competitive Equilibrium from Equal Incomesfor Combinatorial Allocation⇤
Eric Budish, Gerard P. Cachon, Judd Kessler, and Abraham Othman¶
July 23, 2015

Abstract:  Combinatorial allocation involves assigning bundles of items to agents when the use of money is not allowed. Course allocation is one common application of combinatorial allocation, in which the bundles are schedules of courses and the assignees are students. Existing mechanisms used in practice have been shown to have serious flaws, which lead to allocations that are inefficient, unfair, or both. A new mechanism proposed by Budish [2011] is attractive in theory, but has several features that limit its feasibility for practice: reporting complexity, computational complexity, and approximations that can lead to violations of capacity constraints. This paper reports on the design and implementation of a new course allocation mechanism, Course Match, that enhances the Budish [2011] mechanism in various ways to make it suitable for practice. To find allocations, Course Match performs a massive parallel heuristic search that solves billions of Mixed-Integer Programs to output an approximate competitive equilibrium in a fake-money economy for courses. Quantitative summary statistics for two semesters of full-scale use at a large business school (Wharton, which has about 1,700 students and up to 350 courses in each semester) demonstrate that Course Match is both fair and efficient, a finding reinforced by student surveys showing large gains in satisfaction and perceived fairness
*****************

In the conclusion, they write

"A critical feature for the success of Course Match is its “strategy-proof” property — a student’s best strategy is to report her true preferences no matter what preferences other students report or what capacities are assigned to each course. This greatly simplifies the student’s reporting task because the student need not form beliefs about how other students will “play” or what clearing prices might be for courses. In contrast, the Wharton Auction (as well as all other course-allocation mechanisms implemented in practice) was not strategy-proof. For example, if a student desires a course but believes that it will have a zero clearing price, then the student should rationally submit a low bid and save tokens to bid on other courses. However, the student may make a mistake and not receive the course she desires if the clearing price turns out to be higher than expected. This bidding mistake is not trivial and it could even lead a student with ample tokens to receive zero courses. Such errors do not happen with Course Match because Course Match effectively bids on behalf of students after all of the clearing prices have been revealed."
...
"while the Course Match mechanism has many desirable theoretical properties, if the preference language given to students is not sufficiently rich (i.e., it does not allow students to express critical preferences) or if students are not able to “speak” this language (i.e., they cannot use the language to correctly report their preferences), then Course Match may not yield desirable results. We are not able to provide direct evidence of the quality of the Course Match preference reporting language and user interface, but the high overall student satisfaction scores provide indirect evidence that the Course Match language is su!ciently rich and easy to use."
...
"We do not claim that the Course Match computational architecture is “optimal.” Indeed, an important question left for future research is whether there are better approaches to finding approximate market-clearing prices than that described here. We do show, however, that the Course Match computational architecture works at Wharton. To borrow a common analogy (e.g., Roth [2002]), ours is an exercise of engineering rather than physics."

Plan ahead: the 2016 Meeting of the Society for Social Choice and Welfare in Lund

The 13th Meeting of the Society for Social Choice and Welfare

JUNE 28 - JULY 1 2016, AT LUND UNIVERSITY

The Society for Social Choice and Welfare will organize its 13th biennial meeting in Lund, Sweden, from 28th June to 1st July, 2016. We welcome you to attend the meeting, and submit and present your research.

Key-note speakers

• Arrow Lecture: Hans Peters (Maastricht University)
• Condorcet Lecture: Gabrielle Demange (Paris School of Economics)
• Presidential Adress: Claude d'Aspremont (Universite Catholique de Louvain)
• Social Choice and Welfare Prize: Fuhito Kojima (Stanford University) and Parag Pathak (MIT)

The venue for the conference is AF-borgen which is located in the beautiful parkLundagård in the very heart of Lund. In this historical area, you can also find theLund University main building, Lund Cathedral, Kungshuset, and Kulturen.

Iran's market for kidneys in the NY Times

Tina Rosenberg writes about the Iranian kidney market: Need a Kidney? Not Iranian? You’ll Wait.

Here's a part:

"Iran’s system has many deficiencies — not least that the very idea clashes with ethical norms observed in many other countries — and the program varies greatly from region to region. But its chief advantage is this: People who need kidneys get them rapidly, rather than die on the waiting list.

In the vast majority of cases, donors know in advance what they will be paid and receive appropriate screening and good medical care before and during the operation. And by getting patients new kidneys instead of keeping them on dialysis, the society saves a lot of money and avoids much misery.

The Iranian model suffers from insufficient funding, lack of follow-up for donors and other problems. But as waiting lists for kidneys grow around the world, Iran offers an important lesson: With good design and regulation, a system that pays donors need not be exploitative or immoral. In Iran, the legal kidney market has prevented the development of the abusive black markets and kidney tourism seen in other countries. As the kidney crisis intensifies, governments should look closely at what Iran has achieved.

For many people, the specifics of how a kidney market works are beside the point — the very idea of paying people to donate organs ends the debate before it starts.

One reason the idea of organ-selling is repugnant is that the human body has a special dignity. But if there’s an ethical barrier to selling the pieces, it was crossed long ago. We sell blood products, sperm and eggs. We pay people to do weird things to their bodies in risky clinical trials.

Perhaps kidney donation is different because kidneys do not grow back (although one healthy kidney is sufficient), and donation requires surgery. It is very safe surgery, but there is always some risk for donors. Perhaps the biggest moral issue in economically unequal societies is that a paid donor is almost always in dire straits, willing to do desperate things for money.

Yet people, especially poor people, take risks for money all the time. “We should ask ourselves why some people find accepting money to donate a kidney and save a life repugnant, but accepting money for being a policeman or miner or soldier — all of which are statistically riskier than donating a kidney — is O.K.,” said Mohammad Akbarpour, a research fellow in the Becker-Friedman Institute of the University of Chicago. “Is there a fundamental difference?”

Competition between Peking and Tsinghua Universities

From the WSJ blog: Top Chinese Universities’ Recruitment Battle Turns Ugly

"China’s version of the Ivy League found itself splattered in mud this week, as top schools Peking University and Tsinghua University accused each other of turning to unsavory recruiting strategies.

The schools are among China’s best, guaranteed to attract the students who score highest on the gaokao, the country’s national college entrance exam. So it was jarring to see the two unleash a public series of mutual recriminations: on social media, an account affiliated with Peking University’s recruiting team in southwestern Sichuan province suggested that Tsinghua’s recruiters in the same region had offered students money as an incentive to enroll in Tsinghua, among other accusations.

In turn, Tsinghua’s Sichuan recruiter struck back, also on social media, saying that Peking University was the one guilty of such behavior. The back-and-forth earned both universities a chiding from China’s education ministry, which on Weibo urged “relevant universities” to respect an orderly enrollment process and refrain from dangling promises, such as large scholarships offers, to “maliciously carry off students.”

Competition for top-scoring students—and assiduous courting of the same—is nothing new among universities in China. But a visible airing of dirty laundry is more unusual, says Percy Jiang, counselor at the local Beijing National Day School.

Peking University and Tsinghua University did not immediately respond to requests for comment.

Universities in China have felt increasing pressure to hold onto the best students, Mr. Jiang notes, as fewer students take the gaokao and more of China’s best students choose to study overseas. This year, 9.4 million students sat the test, down from 10.5 million in 2008.

It's difficult to keep refugees where they don't want to be...

I recently blogged about Refugee resettlement as a matching problem. It's hard to resettle refugees in places that they don't want to be  (that's what made them refugees in the first place). Yesterday's headlines about the French side of the English Channel tell that story clearly.

From the Telegraph: Calais migrants: Theresa May calls for 'urgent' security upgrade as 1,500 try to storm Channel Tunnel

From the NY Times: Britain and France Scramble as Migrants Keep Trying to Cross Channel

The grey market for fetal tissue (it can't be sold for a profit, but profits can be made on processing)

There has been recent attention to fetal stem cells, which are used in research into a number of diseases.
The NY Times has the story:
Fetal Tissue From Abortions for Research Is Traded in a Gray Zone

"Videos released by an anti-abortion group during the last two weeks have drawn attention to a little-known practice: the buying, selling and research use of fetal tissue acquired from abortion clinics.

"The group behind the tapes accuses Planned Parenthood of selling fetal tissue for profit — which is illegal and which Planned Parenthood denies doing. House Republicans plan to investigate. This may be just one more battle in the nation’s long war over abortion, but the dispute has raised questions about who the buyers and sellers are, what fetal tissue is used for and what the law allows.
...
"Companies that obtain the tissue from clinics and sell it to laboratories exist in a gray zone, legally. Federal law says they cannot profit from the tissue itself, but the law does not specify how much they can charge for processing and shipping.

"The National Institutes of Health spent $76 million on research using fetal tissue in 2014 with grants to more than 50 universities, including Columbia, Harvard, the Massachusetts Institute of Technology, Stanford, Yale and the University of California in Berkeley, Irvine, Los Angeles, San Diego and San Francisco. It expects to spend the same amount in 2015 and 2016.
...
"Fetal tissue can be used only with the consent of the woman having an abortion. Some researchers receive the tissue from abortion clinics at their own institutions, or from tissue banks maintained by some universities. Many buy the tissue from companies that act as middlemen. Those companies pay small fees, usually $100 or less a specimen, to abortion providers like Planned Parenthood, who say they charge only what they need to cover their expenses. The companies then process the tissue and sell it to researchers for higher prices that reflect the processing.

"The fees, which can run to thousands of dollars for a tiny vial of cells, do not break the law, according to Arthur Caplan, the director of the division of medical ethics at NYU Langone Medical Center.

“It appears to be legal, no matter how much you charge,” Dr. Caplan said, adding that there appears to be little or no oversight of the processing fees. “It’s a very gray and musty area as to what you can charge.”

"Many researchers buy tissue from two small California companies. StemExpress, a five-year-old business based in Placerville, Calif., describes itself as “the largest provider of maternal blood and fetal tissue globally.” It also says it offers “special discounts to the academic community.”
...
"George J. Annas, a law professor and bioethicist at Boston University, said, “What’s going on now is probably legal, but Congress won’t like it.”

"Regarding the companies, Mr. Annas said: “They won’t be real happy that this is all out in the public. This threatens their business. Even if what they’re doing is legal, the law can easily be changed.”

Do pricing guidelines for human eggs violate antitrust laws?

The WSJ has the story:
Putting a Price on a Human Egg
Lawsuit claims price guidelines used by fertility clinics artificially suppress the amount women can get for their eggs

"How much is a human egg worth? The question is at the heart of a federal lawsuit brought by two women who provided eggs to couples struggling with infertility.

The women claim the price guidelines adopted by fertility clinics nationwide have artificially suppressed the amount they can get for their eggs, in violation of federal antitrust laws.

The industry groups behind the price guidance—which discourages payments above $10,000 per egg-donation cycle—say caps are needed to prevent coercion and exploitation in the egg-donation process.

But the plaintiffs say the guidelines amount to an illegal conspiracy to set prices in violation of antitrust laws. The conspiracy, they argue in court papers, has deprived women nationwide a free market in which to sell their eggs, and enabled fertility clinics to “reap anticompetitive profits for themselves.”

“It’s naked, illegal price-fixing,” said Michael McLellan, a lawyer for the women.
...

...
"Other egg donors say a robust market depends on compensation. “I helped couples achieve their dreams, and in return they helped me go to law school, buy an apartment, pursue my dreams when I was in my 20s,” said Gina-Marie Madow, a four-time egg donor now working as a lawyer at Circle Egg Donation, a Boston-based egg-donation agency. Ms. Madow said $10,000 “feels like the right amount for women to get” for a cycle but didn’t understand the reason behind the price cap. “I just don’t think the [organizations have] done a good job explaining why it exists,” she said.

The price caps might also guard against worries that women might pay more for eggs from mothers of certain ethnic or racial backgrounds, or with such traits as physical beauty or high intelligence. Such a market exists, largely through a small number of agencies that cater to couples willing to pay a premium.

“It’s a concern about eugenics, that women will pay more for eggs from an Ivy League grad,” said John Robertson, a professor of law and bioethics at the University of Texas.

Kimberly Krawiec, a law professor at Duke University who has studied the egg-donor industry, played down such concerns, adding that mothers-to-be generally aren’t looking to build a genetically superior child. Ms. Krawiec said she had little issue with couples paying more for eggs from women with, say, high SAT scores. “Fertile people have been screening for beauty and intelligence for years and years,” she said. “It’s called dating.”

Roger Doooley interviews me about Who Gets What and Why

Ep #68: Disrupting Markets with Nobel Winner Al Roth

07-23-2015 | 0 COMMENTS | ROGER DOOLEY

My guest today on The Brainfluence Podcast is quite a unique scholar. Al Roth is the Craig and Susan McCaw Professor of Economics at Stanford University, as well as the Gund Professor of Economics and Business Administration Emeritus at Harvard University. He is the author ofWho Gets What And Why: The New Economics of Matchmaking and Market Design. He also happens to have been awarded the Nobel Prize for Economics in 2012.

While winning a Nobel Prize makes Al unique, what sets him apart is his application of his knowledge of economics in solving seemingly intractable real-world problems. His insights have resulted in market creation in areas like city-wide school admissions, hospital internship negotiations, and kidney transplants that save thousands of lives each year.

Today, we’re going to hear how an economics professor turned into a lifesaver and how you can apply some of Al’s insights to your business ventures. The principles that Al has brought to the medical field, and that have been used in some of the great entrepreneurial successes in recent history, are readily accessible to you. These same principles can be used to understand and identify novel business opportunities, reshape the way you view your business and help you experience incredible success.

If you enjoy the show, please drop by iTunes and leave a review while you are still feeling the love! Reviews help others discover this podcast, and I greatly appreciate them!

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Ben Hippen on the economics of transplantation and dialysis

Dr Hippen replies to an earlier article suggesting that incremental changes in current transplant practice could remove the need to radically increase the supply of kidneys, e.g. through financial incentives...

Debating Organ Procurement Policy Without Illusions

Benjamin Hippen, MD American Journal of Kidney Diseases

"For poor patients, the primary payor for dialysis is Medicare, Medicaid, or some hybrid, unless they are ineligible for these programs. The profit margins of dialysis facilities with an average payor mix of Medicare, Medicaid, and commercial insurance is 3% to 4%.12 Crucially, a facility composed entirely of patients with Medicare and/or Medicaid as the primary payor is financially unsustainable because payments to facilities on a per-treatment basis are, depending on local labor and other overhead costs to the facility, frequently less than the cost to the facility to provide the treatment. Although a dialysis facility requires a minimum number of patients to cover labor and operational overhead costs, the total net margin of a typical facility is achieved through cross-subsidization from collections from commercially insured patients."
...

"A staple of opponents of financial incentives is that incentive proposals would not even bear consideration if transplantation professionals would just stop wasting perfectly good kidneys. Citing a 19% rate of organ discard in the United States, the authors argue that if only we biopsied more kidneys before turndown, made more use of organs with a Kidney Donor Profile Index > 85% (previously known as expanded criteria donors), and increased use rates of organ donation after circulatory death just like many European centers, we would be a long way toward solving the problem.

These arguments betray a lack of understanding of the extant regulatory burdens and financial constraints on US transplantation centers. In the United States, the expected risk-adjusted rate of death-uncensored transplant survival for a deceased donor kidney at 1 year is 96% (14; Fig 6.2), and 1-year expected patient survival is 98% to 99%. These outcomes represent the expectations of transplantation centers by CMS regulators, and failure to achieve these outcomes invites intense regulatory scrutiny under threat of involuntary closure.15 In the last several years, nearly 100 transplantation programs in the United States have gone through expensive stressful “mitigating factors” applications with CMS to avoid involuntary closure because of reported outcomes that were below risk-adjusted expected outcomes, although the data and veracity of the methodology used to calculate risk adjustment has been heavily criticized.16 With some frequency, scrutinized centers are required to enter into a Systems Improvement Agreement, essentially a contract with CMS to put oversight of the transplantation program into a multiyear third-party receivership, at extravagant expense to the transplantation center, until reported outcomes improve.

Regulatory scrutiny of programs that fall below expected outcomes is typically accompanied by denial of Center of Excellence status by CMS. Loss of this designation often causes commercial insurers to cancel insurance contracts and direct referrals to other programs. This is a profound incentive to embrace risk aversion.16 and 17 Refashioning insurance agreements and changing ingrained referral patterns is a slow process and can pose significant medium-term challenges to the financial stability of a transplantation program long after the quality issues have been resolved to a regulator’s satisfaction."

Nash equilibrium: something on which economists agree

The IGM Forum asks a panel of economists whether they agree or disagree with a given statement. The following statement drew a lot of agreement:

Nash Equilibrium

"Behavior in many complex and seemingly intractable strategic settings can be understood more clearly by working out what each party in the game will choose to do if they realize that the other parties will be solving the same problem. This insight has helped us understand behavior as diverse as military conflicts, price setting by competing firms and penalty kicking in soccer."

Kidney exchange in Turkey, and the state of Turkish transplantation

Here are two articles from the June issue of Transplantation Proceedings

First International Paired Exchange Kidney Transplantations of Turkey    

M. Tuncer

, S. Tekin

, Y. Yuksel

, L. Yücetin

, L. Dosemeci

, A. Sengul

 and A. Demirbaş

Transplantation Proceedings, 2015-06-01, Volume 47, Issue 5, Pages 1294-1295, Copyright © 2015 Elsevier Inc.

Abstract

Objective

We estimated that many patients on the waiting list for kidney transplantation in Turkey have immunologicaly incompatible suitable living donors. Paired exchange kidney transplantation (PETx) is superior to desensitization for patients with incompatible donors. Recently we decided to begin an international PETx program.

Methods

We report three international living related paired kidney transplantations which occurred between May 14,2013, and March 7, 2014. The international donor and recipient operations were performed at Medical Park Hospital, Antalya, Turkey. All pairs were living related and written proofs were obtained according to Turkish laws. As with the donor procedures, the transplantation procedures were performed at the same time.

Results

The uniqueness of these transplantations was that they are the first international exchange kidney transplantations between Turkey and Kirghizia. Currently all recipients are alive with wel-functioning grafts.

Conclusion

In our institute, a 5% increase was obtained in living-related kidney transplantations by the help of PETx on a national basis. We believe that international PETx may also have the potential to expand the donor pool.

***************

State of Turkish Transplantation    

• Sukru H. Emre Prof.
•  and Ulug Eldegez Prof.

Transplantation Proceedings, 2015-06-01, Volume 47, Issue 5, Pages 1243-1243, Copyright © 2015 Elsevier Inc.

The 10th Congress of the Turkish Transplantation Centers Coordination Association (TTCCA) was held on October 15–18, 2014 in the ancient city of Bodrum, Turkey (formerly Halicarnassus), where one of the Seven Wonders of the Ancient World, “Mausoleum at Halicarnassus,” resides.

This congress also marked the 20th anniversary of the TTCCA. Since its inaugural meeting, TTCCA's congresses have hosted international leaders in the fields of transplantation in transplant immunology, hepatology, nephrology, surgery, radiology, infectious disease, intensive care, nursing, and other related disciplines. Throughout the years, these congresses have served as a great training ground for young Turkish physicians, surgeons, and scientists to meet with world experts and discuss cases. These congresses have also helped Turkish physicians develop international networks so that they may visit transplant centers around the world.

Twenty years ago, TTCCA was established by two pioneers of Turkish transplant surgery: Professors Tuncer Karpuzoglu and Ulug Eldegez. These men were the ones who approached the young transplant surgeons, physicians, immunologists, and nurses to welcome them, encourage them, guide them and point them in the right direction. TTCCA has had bi-annual national meetings since its inception. These meetings have brought almost all transplantation centers in Turkey together under the TTCCA and initiated a nationwide deceased organ distribution system for kidney, liver, and heart transplantations. This effort was sponsored by a grant provided by Novartis. This was the first attempt in Turkey to institute the equal, fair sharing of organs procurred from deceased organ donors. After almost 10 years of serving in this capacity, TTCCA partnered with the Ministry of Health of Turkey (MoH) to achieve the current organ allocation system. During the development of the new organization under the auspices of the MoH, TTCCA leadership and many members have played crucial roles by serving on many committees of this national organization.

As a result of these efforts ignited by TTCCA, solid organ transplantation in Turkey has became a routine procedure with reasonably good outcomes.

Despite these achievements, there are many areas that the transplantation society and MoH can work on:

• 1. 
  Based on the 2014 statistics, approximately 80% of kidney and liver transplants were done with living donors and only 20% of organs were from deceased donors. In living donor liver transplantation, Turkey is the one of the leading countries in the world together with South Korea. These ratios are the opposite to the ratios of Europe and the US where most of donations are from deceased donors. Therefore, there is an ample opportunity to increase deceased organ donation in Turkey. This effort requires continuous education of the public on organ donation.
• 2. 
  It is imperative to establish a Turkish Transplantation Network similar to UNOS. Besides what has been achieved, this organization should be in charge of increasing the number of deceased donors, more detailed organ specific data from transplant centers, auditing, controlling the quality of transplant centers in terms of policies, processes, quality and accreditation of medical and surgical staff involved in transplant centers, education, and monitoring transplant related disease transmission.

TTCCA and MoH have been working with The Transplantation Society (TTS), World Health Organization (WHO), EuroTrans and the Declaration of Istanbul on Organ Trafficking and Transplantation Tourism leadership to honor the concept of the “gift of life,” prevent organ trafficking and increase the number of deceased donors for transplantation. I hope that these commendable efforts would be honored by TTS by allowing the 2020 World Congress to be held in Istanbul, Turkey.

It has been my pleasure to live through these amazing improvements in Turkish Transplantation along the last 20 years.